APPEAL from the Circuit Court of Rock Island County; the Hon.
ROBERT M. BELL, Judge, presiding.
MR. JUSTICE ALLOY DELIVERED THE OPINION OF THE COURT:
Rehearing denied July 5, 1978.
Plaintiff Charles Toppert instituted an action in the Circuit Court of Rock Island County to recover damages for the failure of defendant Bunge Corporation to pay for 10,000 bushels of corn delivered to defendant Bunge by plaintiff, pursuant to a contract between the parties. Bunge filed a counterclaim seeking to recover damages for the alleged failure of plaintiff to deliver approximately 20,000 bushels of corn under the terms of two other contracts between the parties. Following a bench trial, the trial court found in favor of plaintiff and as against defendant on both the complaint of plaintiff and defendant's counterclaim. On appeal to this court, defendant argues (1) that the trial court's finding that four contracts between plaintiff and defendant were not separate and distinct but rather an "ongoing arrangement," was against the manifest weight of the evidence and (2) that the plaintiff was not entitled, under section 2-610 of the Uniform Commercial Code (Ill. Rev. Stat. 1977, ch. 26, par. 2-610), to suspend his performance on two outstanding contracts, on the contention that plaintiff's obligation to perform the two contracts was not excused by the fact that Bunge withheld payment on a prior contract which was fulfilled by plaintiff.
The record indicates that in 1973, plaintiff Charles Toppert was a farmer at Hillsdale, Illinois, and farmed approximately 1,000 acres. Plaintiff sometimes exchanged work with his father, Burdette Toppert, and his brother, Larry Toppert. Defendant Bunge Corporation owns and operates a grain elevator in Albany, Illinois. Defendant Bunge buys grain from farmers and from county grain elevators, both for immediate delivery and for delivery several months in the future. Many of defendant's grain purchases are initiated by telephone, when farmers call defendant's office and offer to sell grain for future delivery (based as to price on the current market price as established by the Chicago Board of Trade). At the close of a business day, defendant would normally type contract forms conforming to the agreements made during the day, and send two copies of the forms to the farmer who is producing the grain. The farmer is requested to keep one copy of the contract, and to sign and return the other copy to defendant Bunge. It appeared, also, that whenever defendant buys grain for future delivery, the contract is immediately negotiated to defendant's St. Louis office and then sold to an outside buyer.
At the end of March 1973, plaintiff Toppert placed calls to defendant's Albany office and made three contracts to sell corn, each contract covering 10,000 bushels and calling for delivery in October or November. The contracts were typed on forms number 0355, 0364 and 0366, respectively, and mailed to Toppert. Toppert signed and returned to defendant Bunge, one copy of each of these contracts. On or about May 15, 1973, plaintiff Toppert called defendant and entered into a fourth contract to sell 10,000 bushels of corn for delivery in October or November. This contract was typed on form number 6079, and mailed to plaintiff. Plaintiff did not sign and return a copy of contract 6079 to defendant Bunge.
Plaintiff Toppert commenced making deliveries to defendant on November 2, 1973. On November 9, 1973, plaintiff Toppert completed delivery of contract number 0355 and commenced delivery on contract number 0364. It was defendant's normal policy to make payment at the time the contract was fulfilled by a farmer. Plaintiff, however, was not paid for his deliveries under contract 0355 until a demand was made by plaintiff's attorney, after which it was finally paid on November 20, 1973. Plaintiff Toppert continued making deliveries to defendant Bunge through the end of November, 1973. On November 28, 1973, defendant Bunge mailed plaintiff a letter extending the time of delivery under the remaining contracts to the end of December. On December 3, 1973, plaintiff completed deliveries under contract number 0364, and commenced delivery under contract number 0366. Defendant, however, refused to make payment to plaintiff on December 3, 1973, for the completed deliveries under contract 0364. Plaintiff, thereafter, made no deliveries after December 3, 1973.
In late November or early December, a meeting was held between plaintiff Toppert, plaintiff's father, plaintiff's brother, defendant's Albany office manager and defendant's district manager. At this time, apparently, defendant had four or five agreements with plaintiff's brother and father, for which contracts had not been signed and returned to defendant Bunge. At this meeting, defendant's representatives talked to plaintiff, his brother and father about getting the contracts signed. There was some discussion at this meeting regarding payment to plaintiff for corn delivered, but defendant's representatives refused to pay plaintiff at that time.
On January 2, 1974, defendant's representatives again met with plaintiff and his father. While most of the discussion apparently concerned the unsigned contracts which defendant had with plaintiff's father, plaintiff asked about payment on his contract which he had fulfilled, but got no action or response from defendant's representatives. On January 4, 1974, defendant Bunge notified plaintiff by letter that it was canceling the final two contracts and requested damages from plaintiff based on the "cover price."
Plaintiff filed his complaint on June 1, 1974, seeking recovery of the contract price for the corn delivered to defendant Bunge under contract number 0364. Defendant counterclaimed for damages under the unfilled contract numbers 0366 and 6079. As we have noted, the trial court, following a bench trial, found in favor of plaintiff on the complaint and also denied defendant's counterclaim. The court found specifically that defendant Bunge had failed to deal in good faith in the transactions since, as established by the testimony of defendant's representative at the trial, defendant had held up payment for plaintiff's delivery under contract number 0364 to insure the continuing performance by plaintiff's brother and father under their contracts with defendant, as well as to use leverage on plaintiff for continuing performance. The trial court concluded that such activities on part of defendant Bunge constituted a wrongful refusal to pay, and that plaintiff was, therefore, justified in suspending his performance under the remaining contracts.
While appellant first asserts error in the trial court's finding that the four contracts between plaintiff and defendant were not separate and distinct, but rather were "ongoing arrangements" between plaintiff and defendant, we believe it is more pertinent to the basic issue in this case to consider the contention made by the defendant that it was error for the trial court to conclude that defendant's failure to pay plaintiff gave plaintiff the right to suspend his performance under the subsequent contracts.
1, 2 We note, initially, that defendant Bunge has, in its reply brief, conceded that the withholding of payment on contract number 0364 was not legally justifiable. We note that section 2-301 of the Uniform Commercial Code Sales (Ill. Rev. Stat. 1977, ch. 26, par. 2-301) provides:
"The obligation of the seller is to transfer and deliver and that of the buyer is to accept and pay in accordance with the contract."
The evidence before the trial court, as well as the concessions made in this Court, establish clearly that defendant was obligated to pay for the deliveries under contract number 0364 on December 3, 1973, when deliveries had been completed under that contract. Defendant, however, did not make payment to plaintiff. Section 2-609(1) of the Uniform Commercial Code Sales (Ill. Rev. Stat. 1977, ch. 26, par. 2-609(1)) provides:
"A contract for sale imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired. When reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand adequate assurance of due performance and until he receives such assurance may if commercially ...